EXECUTION COPY
$1,000,000,000
CREDIT AGREEMENT
dated as of
July 17, 1998
among
Armstrong World Industries, Inc.,
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Administrative Agent
___________________________
Bank of America National Trust and Savings Association,
Documentation Agent
The Chase Manhattan Bank,
Syndication Agent
______________________________
J.P. Morgan Securities Inc.,
Arranger
BancAmerica Robertson Stevens
Chase Securities Inc.,
Co-Arrangers
TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions
Section 1.01. Definitions 1
Section 1.02. Accounting Terms and Determinations 11
Section 1.03. Types of Borrowings 11
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend 12
Section 2.02. Procedure for Borrowing 12
Section 2.03. Notes 14
Section 2.04. Maturity of Loans 14
Section 2.05. Interest Rates 14
Section 2.06. Facility Fees 18
Section 2.07. Optional Termination or Reduction of
Commitments 19
Section 2.08. Mandatory Termination and Reduction of
Commitments 19
Section 2.09. Optional Payments 21
Section 2.10. General Provisions as to Payments 21
Section 2.11. Funding Losses 22
Section 2.12. Computation of Interest and Fees 22
ARTICLE 3
Conditions
Section 3.01. Effectiveness 23
Section 3.02. Borrowings 24
ARTICLE 4
Representations and Warranties
Section 4.01. Corporate Existence and Power 24
Section 4.02. Corporate and Governmental Authorization;
No Contravention 24
Section 4.03. Binding Effect 25
Section 4.04. Financial Information 25
Section 4.05. Litigation 26
Section 4.06. Environmental Matters 26
Section 4.07. Taxes 26
Section 4.08. Significant Subsidiaries 26
Section 4.09. Not an Investment Company 27
Section 4.10. Full Disclosure 27
ARTICLE 5
Covenants
Section 5.01. Information 28
Section 5.02. Payment of Obligations 29
Section 5.03. Maintenance of Property; Insurance 29
Section 5.04. Conduct of Business and Maintenance 30
Section 5.05. Compliance with Laws 30
Section 5.06. Inspection of Property, Books and Records 30
Section 5.07. Minimum Consolidated Net Worth 30
Section 5.08. Negative Pledge 31
Section 5.09. Consolidations, Mergers and Sales of Assets 31
Section 5.10. Use of Proceeds 32
ARTICLE 6
Defaults
Section 6.01. Events of Default 32
Section 6.02. Notice of Default 34
ARTICLE 7
The Agents
Section 7.01. Appointment and Authorization 35
Section 7.02. Administrative Agent and Affiliates 35
Section 7.03. Action by Administrative Agent 35
Section 7.04. Consultation with Experts 35
Section 7.05. Liability of Administrative Agent 35
Section 7.06. Indemnification 36
Section 7.07. Credit Decision 36
Section 7.08. Successor Administrative Agent 36
Section 7.09. Agents' Fees 37
Section 7.10. Other Agents 37
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate 37
Section 8.02. Illegality 38
Section 8.03. Increased Cost and Reduced Return 38
Section 8.04. Taxes 40
Section 8.05. Base Rate Loans Substituted for Affected Fixed
Rate Loans 42
Section 8.06. Substitution of Bank 42
ARTICLE 9
Miscellaneous
Section 9.01. Notices 43
Section 9.02. No Waivers 43
Section 9.03. Expenses; Indemnification 43
Section 9.04. Sharing of Set-Offs 44
Section 9.05. Amendments and Waivers 45
Section 9.06. Successors and Assigns 45
Section 9.07. Collateral 47
Section 9.08. Governing Law; Submission to Jurisdiction 47
Section 9.09. Counterparts; Integration 47
Section 9.10. WAIVER OF JURY TRIAL 47
Section 9.11. Amendment of Existing Agreement 47
Pricing Schedule
Commitment Schedule
Exhibit A - Note
Exhibit B - Opinion of Counsel for the Borrower
Exhibit C - Opinion of Special Counsel for the Agents
Exhibit D - Assignment and Assumption Agreement
CREDIT AGREEMENT
AGREEMENT dated as of July 17, 1998 among ARMSTRONG WORLD INDUSTRIES, INC.,
the BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"ACQUISITION" means the acquisition by the Borrower of TPC pursuant to the
Acquisition Agreement.
"ACQUISITION AGREEMENT" means the Agreement and Plan of Merger, dated as of
June 12, 1998 among the Borrower, the Offeror Subsidiary and TPC, as amended
from time to time in accordance with its terms; provided that no such amendment
having any substantial effect on the terms of the Acquisition shall be effective
for purposes of references thereto in this Agreement unless approved in writing
by the Required Banks.
"ADJUSTED CD RATE" has the meaning set forth in Section 2.05(b).
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the meaning set forth in
Section 2.05(c).
"ADMINISTRATIVE AGENT" means Morgan Guaranty Trust Company of New York in
its capacity as administrative agent for the Banks hereunder, and its successors
in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"AGENT" means any of the Administrative Agent, the Documentation Agent or
the Syndication Agent, and "AGENTS" means any two or more of the foregoing.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"ASSESSMENT RATE" has the meaning set forth in Section 2.05(b).
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"BANK" means (i) each Person listed on the Commitment Schedule, (ii) each
Assignee which becomes a Bank pursuant to Section and (iii) their respective
successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
"BASE RATE LOAN" means a Loan to be made by a Bank as a Base Rate Loan in
accordance with the applicable Notice of Borrowing or pursuant to Article 8.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"BORROWER" means Armstrong World Industries, Inc., a Pennsylvania
corporation, and its successors.
"BORROWER'S 1997 FORM 10-K" means the Borrower's annual report on Form 10-K
for 1997, as filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
"BORROWER'S LATEST FORM 10-Q" means the Borrower's quarterly report on Form
10-Q for the quarter ended March 31, 1998, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
"BORROWING" has the meaning set forth in Section 1.03.
"CD BASE RATE" has the meaning set forth in Section 2.05(b).
"CD LOAN" means a Loan to be made by a Bank as a CD Loan in accordance with
the applicable Notice of Borrowing.
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"CD MARGIN" has the meaning set forth in Section 2.05(b).
"CD REFERENCE BANKS" means Bank of America National Trust and Savings
Association, The Chase Manhattan Bank, Citibank, N.A., Westdeutsche Landesbank
Girozentrale and Morgan Guaranty Trust Company of New York.
"COMMITMENT" means, with respect to each Bank listed in the Commitment
Schedule, the amount set forth opposite the name of such Bank in the Commitment
Schedule, and with respect to any Bank which becomes a party to this Agreement
pursuant to Section 9.06(c), the amount of the Commitment thereby assumed by
such Bank, in each case as such amount may from time to time be reduced pursuant
to Sections 2.07, 2.08 and 9.06(c) or increased pursuant to Section 9.06(c).
"COMMITMENT SCHEDULE" means the Schedule attached hereto identified as
such.
"CONSOLIDATED NET WORTH" means at any date the consolidated stockholders'
equity of the Borrower and its Consolidated Subsidiaries determined as of such
date; provided, that for purposes of determining compliance with Section 5.07,
up to $100,000,000 in special charges subsequent to the date hereof related to
litigation shall be disregarded.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.08 and the definitions of Material
Debt and Material Financial Obligations, all contingent obligations) of such
Person to reimburse any bank or other Person in respect of amounts paid under a
letter of credit or similar instrument, (vi) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise
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an obligation of such Person, and (vii) all Debt of others Guaranteed by such
Person.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"DOCUMENTATION AGENT" means Bank of America National Trust and Savings
Association, in its capacity as documentation agent in respect of this
Agreement.
"DOLLARS" or "$" means such coin or currency of the United States of
America as at the time shall be legal tender for the payment of public and
private debts.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on the
one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"DOMESTIC LOANS" means CD Loans or Base Rate Loans or both.
4
"DOMESTIC RESERVE PERCENTAGE" has the meaning set forth in Section 2.05(b).
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 3.01.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
"EURO-DOLLAR LOAN" means a Loan to be made by a Bank as a Euro-Dollar Loan
in accordance with the applicable Notice of Borrowing.
5
"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.05(c).
"EURO-DOLLAR REFERENCE BANKS" means the principal London offices of Bank of
America National Trust and Savings Association, The Chase Manhattan Bank,
Citibank, N.A., Westdeutsche Landesbank Girozentrale and Morgan Guaranty Trust
Company of New York.
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.05(c).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan Guaranty Trust Company of New
York on such day on such transactions as determined by the Administrative Agent.
"FIXED RATE LOANS" means CD Loans or Euro-Dollar Loans or both.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt of any other Person,
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term "GUARANTEE" used as a
verb has a corresponding meaning.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
6
(a) "INTEREST PERIOD" means: with respect to each Euro-Dollar Borrowing, the
period commencing on the date of such Borrowing and ending one, two, three
or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(i) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (iii) below, be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-
Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;
(ii) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (iii) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(b) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(i) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (ii) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(ii) any Interest Period which would otherwise end after the Date
Termination shall end on the Termination Date.
(c) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
(i) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (ii) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(ii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
7
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"LOAN" means a Domestic Loan or a Euro-Dollar Loan and "LOANS" means
Domestic Loans or Euro-Dollar Loans or any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.05(c).
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL DEBT" means Debt (other than the Notes) of the Borrower and/or
one or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal or face amount exceeding $20,000,000.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of Debt
and/or payment obligations in respect of Derivatives Obligations of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, exceeding in the aggregate $20,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $50,000,000.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NET CASH PROCEEDS" means the total amount of cash proceeds received by the
Borrower or any Subsidiary in respect of any Reduction Event, less underwriters'
fees, brokerage commissions, related professional fees and other customary out-
of-
8
pocket expenses payable by the Borrower or such Subsidiary in connection with
such Reduction Event.
"NOTES" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "NOTE" means any one of such promissory notes issued hereunder.
"NOTICE OF BORROWING" has the meaning set forth in Section .
"OFFER" means the offer by the Offeror Subsidiary to purchase shares of
common stock, par value $.01 per share of TPC (the "SHARES") representing not
less than a majority of the Shares outstanding on a fully diluted basis pursuant
to the Offer to Purchase.
"OFFER TO PURCHASE" means the Offer to Purchase dated June 19, 1998 and
supplemented as of July 2, 1998 by the Offeror Subsidiary to the stockholders of
TPC, as amended from time to time in accordance with its terms; provided that no
--------
such amendment having any substantial effect on the terms of the Acquisition
shall be effective for purposes of references thereto in this Agreement unless
approved in writing by the Required Banks.
"OFFEROR SUBSIDIARY" means Sapling Acquisition, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.
"PARENT" means, with respect to any Bank, any Person controlling such Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
9
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"PRICING SCHEDULE" means the Schedule attached hereto identified as such.
"PRIME RATE" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"REDUCTION EVENT" means any issuance by the Borrower or any of its
Subsidiaries of any equity securities or any debt securities with a maturity in
excess of one year (other than Debt incurred under this Agreement); provided
that neither the Borrower's disposition of its stock in Dal-Tile International
Inc. nor any issuance of securities to finance the acquisition of DLW AG shall
constitute a Reduction Event.
"REFERENCE BANKS" means the CD Reference Banks or the Euro-Dollar Reference
Banks, as the context may require, and "REFERENCE BANK" means any one of such
Reference Banks.
"REFUNDING BORROWING" means a Borrowing which, after application of the
proceeds thereof, results in no net increase in the outstanding principal amount
of Loans made by any Bank.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 66 2/3% of the aggregate unpaid
principal amount of the Loans.
"REVOLVING CREDIT PERIOD" means the period from and including the Effective
Date to but excluding the Termination Date.
"SENIOR EXECUTIVE OFFICER" means the Chairman of the Board, President and
Chief Executive Officer, the Senior Vice President and Chief Financial Officer
or the Senior Vice President, Secretary and General Counsel of the Borrower.
10
"SIGNIFICANT SUBSIDIARY" means any Subsidiary which satisfies the criteria
set forth in subparagraph (b) of the definition of "SIGNIFICANT SUBSIDIARY" in
Rule 1-02 of Regulation S-X of the Securities and Exchange Commission, as in
effect on the date hereof.
"SUBSIDIARY" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "SUBSIDIARY" means a Subsidiary of the Borrower.
"SYNDICATION AGENT" means The Chase Manhattan Bank, in its capacity as
syndication agent in respect of this Agreement.
"TERMINATION DATE" means July 16, 1999, or, if such day is not a Euro-
Dollar Business Day, the next preceding Euro-Dollar Business Day.
"TPC" means Triangle Pacific Corporation, a Delaware corporation.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the
11
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article 5
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Banks wish to amend Article 5 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Banks.
Section 1.03. Types of Borrowings. The term "BORROWING" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 5 on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement by reference to the pricing of Loans
comprising such Borrowing (e.g., a "EURO-DOLLAR BORROWING" is a Borrowing
comprised of Euro-Dollar Loans).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. During the Revolving Credit Period each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
to make loans to the Borrower pursuant to this Section from time to time in
amounts such that the aggregate principal amount of Loans by such Bank at any
one time outstanding shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate principal amount of
$5,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing
may be in the aggregate amount of the unused Commitments) and shall be made from
the several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay, or to
the extent permitted by Section 2.09, prepay Loans and reborrow at any time
during the Revolving Credit Period under this Section.
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(a) Section 2.02. Procedure for Borrowing. The Borrower shall give the
Administrative Agent notice (a "NOTICE OF BORROWING") not later than 10:30
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y)
the second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Administrative Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share
of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its share of such Borrowing, in Federal or other
funds immediately available in New York City, to the Administrative Agent
at its address referred to in Section 9.01. Unless the Administrative Agent
determines that any applicable condition specified in Article 3 has not
been satisfied, the Administrative Agent will make the funds so received
from the Banks available to the Borrower at the Administrative Agent's
aforesaid address.
(d) If any Bank makes a new Loan hereunder on a day on which the Borrower
is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank
to the Administrative Agent as provided in subsection (c), or remitted by
the Borrower to the Administrative Agent as provided in Section 2.10, as
the case may be.
(e) Unless the Administrative Agent shall have received notice from a Bank
prior to the time of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share
available to the
13
Administrative Agent on the date of such Borrowing in accordance with
subsections (c) and (d) of this Section and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and, if such Bank
fails to do so within three Domestic Business Days of demand therefor, the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the
interest rate applicable thereto pursuant to Section 2.05 and (ii) in the case
of such Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
(f) Section 2.03. Notes. The Loans of each Bank shall be evidenced by a single
Note payable to the order of such Bank for the account of its Applicable
Lending Office in an amount equal to the aggregate unpaid principal amount
of such Bank's Loans.
(g) Each Bank may, by notice to the Borrower and the Administrative Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "NOTE" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(h) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part
14
of its Note a continuation of any such schedule as and when required.
Section 2.04. Maturity of Loans. Each Loan included in any Borrowing shall
mature, and the principal amount thereof shall be due and payable, on the last
day of the Interest Period applicable to such Borrowing.
Section 2.05. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable for each Interest Period on the
last day thereof. Any overdue principal of or interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the CD Margin for such day plus the Adjusted CD
Rate applicable to such Interest Period; provided that if any CD Loan shall, as
a result of clause (b)(ii) of the definition of Interest Period, have an
Interest Period of less than 30 days, such CD Loan shall bear interest during
such Interest Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than 90 days, at intervals of 90
days after the first day thereof. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the CD Margin
for such day plus the Adjusted CD Rate applicable to the Interest Period for
such Loan and (ii) the rate applicable to Base Rate Loans for such day.
"CD MARGIN" means a rate per annum determined in accordance with the
Pricing Schedule.
The "ADJUSTED CD RATE" applicable to any Interest Period means a rate per
annum determined pursuant to the following formula:
[ CDBR ]*
ACDR= [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR= Adjusted CD Rate
15
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
------------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD BASE RATE" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at face
value from each CD Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to such
Interest Period."DOMESTIC RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"ASSESSMENT RATE" means for any day the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified as
adequately capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R. (S)
327.4(a) (or any successor provision) to the Federal Deposit Insurance
Corporation (or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United States. The
Adjusted CD Rate shall be adjusted automatically on and as of the effective date
of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto,
at a rate per annum equal to the
16
sum of the Euro-Dollar Margin for such day plus the Adjusted London Interbank
Offered Rate applicable to such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
"EURO-DOLLAR MARGIN" means a rate per annum determined in accordance with
the Pricing Schedule.
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period means
the average (rounded to the nearest 1/16 of 1%) of the respective rates per
annum at which deposits in dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "EUROCURRENCY LIABILITIES" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such day plus
the Adjusted London Interbank Offered Rate applicable to the Interest Period for
17
such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for such day plus
the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of
1%) by dividing (x) the average (rounded to the nearest 1/16 of 1%) of the
respective rates per annum at which one day (or, if such amount due remains
unpaid more than three Euro-Dollar Business Days, then for such other period of
time not longer than six months as the Administrative Agent may select) deposits
in dollars in an amount approximately equal to such overdue payment due to each
of the Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference
Bank in the London interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).
(e) The Administrative Agent shall determine each interest rate applicable to
the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish quotations to
the Administrative Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Administrative Agent shall determine
the relevant interest rate on the basis of the quotation or quotations furnished
by the remaining Reference Bank or Banks or, if none of such quotations is
available on a timely basis, the provisions of Section 8.01 shall apply. So long
as quotations from at least five (or four) Reference Banks are available, the
Administrative Agent shall disregard the highest two (or one) such quotations in
determining the relevant interest rate.
Section 2.06. Facility Fees. (a) The Borrower shall pay to the
Administrative Agent for the account of the Banks ratably a facility fee at the
Facility Fee Rate (determined daily in accordance with the Pricing Schedule).
Such facility fee shall accrue (i) from and including the date of this Agreement
to but excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the Termination Date or
such earlier date of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal amount of
the Loans. Accrued fees under this Section shall be payable quarterly on the
last day of each March, June, September and December and upon the date of
termination of the Commitments in
18
their entirety (and, if later, the date the Loans shall be repaid in their
entirety).
(b) On the date of satisfaction of the conditions specified in clause (a)
of Section 3.01, the Borrower shall pay to the Administrative Agent for the
account of each Bank a participation fee in the amount heretofore mutually
agreed.
Section 2.07. Optional Termination or Reduction of Commitments. During
the Revolving Credit Period, the Borrower may, upon at least three Domestic
Business Days' notice to the Administrative Agent, (i) terminate the Commitments
at any time, if no Loans are outstanding at such time or (ii) ratably reduce
from time to time by an aggregate amount of $25,000,000 or any larger multiple
of $5,000,000, the aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans.
Section 2.08. Mandatory Termination and Reduction of Commitments. (a) The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
(b) The Commitments shall be ratably reduced automatically in the event that
the Borrower or any of its Subsidiaries shall at any time, or from time to
time, after the date hereof receive any Net Cash Proceeds of any Reduction
Event, by an amount equal to the largest multiple of $1,000,000 which does
not exceed the amount of such Net Cash Proceeds; provided that any such
reduction made pursuant to this subsection (b) shall not exceed such amount
(if any) as shall be necessary so that the aggregate amount of the
Commitments, as so reduced, is $500,000,000. The reductions in the
Commitments required by this subsection shall be effective on the fifth
Euro-Dollar Business Day following receipt by the Borrower or any of its
Subsidiaries, as the case may be, of such Net Cash Proceeds; provided that
(i) if the amount of the Net Cash Proceeds in respect of any Reduction
Event is less than $5,000,000, such reduction shall be effective upon
receipt of proceeds such that, together with all other such amounts
received in the same calendar month and not previously applied, the amount
of such Net Cash Proceeds is equal to at least $5,000,000; and
(ii) if and to the extent such reduction would otherwise reduce the
aggregate amount of the Commitments to an amount less than the related
Dedicated Amount, such reduction shall, unless the Agent otherwise notifies
the
19
Borrower upon request of the Required Banks, be deferred so as to
become effective simultaneously with reductions in the Dedicated Amount.
For purposes of this clause (ii):
"DEDICATED AMOUNT" means the sum of the aggregate principal
amount of Fixed Rate Loans and the aggregate face amount of Supported
Commercial Paper which, in each case, are outstanding at the time the
Borrower or a Subsidiary receives Net Cash Proceeds of the related
Reduction Event. The Dedicated Amount shall be reduced at each
subsequent maturity of such Fixed Rate Loans and Supported Commercial
Paper by the amount then maturing.
"SUPPORTED COMMERCIAL PAPER" means commercial paper of the
Borrower which requires liquidity support in the form of undrawn bank
commitments and for which no such commitments other than the
Commitments are available. At any time at which the Borrower has other
committed bank facilities available as liquidity support for commercial
paper, outstanding commercial paper shall be allocated first to such
other facilities, so that only the amount which cannot be supported
thereby shall constitute Supported Commercial Paper. Such allocation to
other facilities shall be in inverse order of maturity, so that the
earliest maturing commercial paper shall be Supported Commercial Paper.
The Borrower shall notify the Agent within two Euro-Dollar Business Days of
receipt by it or a Subsidiary of Net Cash Proceeds of a Reduction Event,
specifying the date and amount thereof and, if the provisions of clause (ii)
relating to Supported Commercial Paper are applicable, setting forth sufficient
information with respect thereto to determine the resultant schedule for
reduction of the Commitments.
(c) On the date of any reduction of Commitments pursuant to this Section, the
Borrower shall repay such principal amount (together with accrued interest
thereon) of, first, outstanding Base Rate Loans, if any, and second, outstanding
----- ------
CD Loans and Euro-Dollar Loans, if any, as may be necessary so that after such
repayment the aggregate outstanding principal amount of the Loans does not
exceed the amount of the Commitment as
20
then reduced. Within the foregoing limits of this subsection (c), each required
payment or prepayment shall be made with respect to such outstanding Borrowings
as the Borrower may designate to the Agent not less than three Euro-Dollar
Business Days prior to the date required for such payment or prepayment or,
failing such designation by the Borrower, as the Agent may specify by notice to
the Borrower and the Banks.
Section 2.09. Optional Payments. (a) Subject in the case of any Fixed Rate
Borrowing to Section 2.11, the Borrower may, upon at least one Domestic Business
Day's notice to the Administrative Agent, prepay any Base Rate Borrowing, upon
at least three Domestic Business Days' notice to the Administrative Agent,
prepay any CD Borrowing or upon at least three Euro-Dollar Business Days' notice
to the Administrative Agent, prepay any Euro-Dollar Borrowing, in each case in
whole at any time, or from time to time in part in amounts aggregating
$5,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
Section 2.10. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, without set-off, counterclaim or other deduction, not later than
12:00 Noon (New York City time) on the date when due, in dollars in Federal or
other funds immediately available in New York City, to the Administrative Agent
at its address referred to in Section 9.01. The Administrative Agent will
promptly distribute to each Bank its ratable share of each such payment received
by the Administrative Agent for the account of the Banks. Whenever any payment
of principal of, or interest on, the Domestic Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in
21
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Rate.
Section 2.11. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article 2, 6, or 8 or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or the last day of an applicable period fixed pursuant to Section
2.05(d), or if the Borrower fails to borrow or prepay any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.02(b) or 2.09(b),
the Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or reasonable expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow or prepay, provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
Section 2.12. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
22
ARTICLE 3
Conditions
Section 3.01. Effectiveness. This Agreement shall become effective on the
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 9.05):
(a) receipt by the Administrative Agent of counterparts hereof signed by each
of the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Administrative Agent in
form satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Administrative Agent of a duly executed Note for the account
of each Bank dated on or before the Effective Date complying with the provisions
of Section 2.03;
(c) receipt by the Administrative Agent of an opinion of David D. Wilson,
Assistant Secretary and Associate General Counsel of the Borrower, substantially
in the form of Exhibit B hereto and covering such additional matters relating to
the transactions contemplated hereby as the Required Banks may reasonably
request;
(d) receipt by the Administrative Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agents, substantially in the form of Exhibit C hereto
and covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(e) receipt by the Administrative Agent of all documents the Administrative
Agent may reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the Notes, and
any other matters relevant hereto, all in form and substance satisfactory to the
Administrative Agent;
(f) receipt by the Administrative Agent of a certificate from a Senior
Executive Officer that tenders for not less than the minimum number of shares
specified in the Offer to Purchase have been accepted in accordance with the
Offer to Purchase, without waiver of any of the conditions thereof; and
(g) the Administrative Agent shall not have received notice from the Required
Banks that, in their reasonable determination, any of the conditions of the
Offer has not been fulfilled;
23
provided that this Agreement (other than the obligations of the Borrower under
Sections 2.06, 2.08, 2.11 and 9.03, which shall be effective upon satisfaction
of the condition specified in clause (a) above) shall not become effective or be
binding on any party hereto unless all of the foregoing conditions are satisfied
not later than August 31, 1998. The Administrative Agent shall promptly notify
the Borrower and the Banks of the Effective Date, and such notice shall be
conclusive and binding on all parties hereto.
Section 3.02. Borrowings. The obligation of any Bank to make a Loan on
the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as required by
Section 2.02;
(b) the fact that, immediately before and after such Borrowing, no Default
shall have occurred and be continuing; and
(c) the fact that the representations and warranties of the Borrower contained
in this Agreement (except (i) the representation and warranty set forth in
Section 4.04(c) and (ii) the representations and warranties set forth in
Sections 4.05 and 4.06 as to any matter which has theretofore been disclosed in
writing by the Borrower to the Banks or in reports filed with the Securities and
Exchange Commission, copies of which reports have been delivered to the Banks)
shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts specified
in clauses (b) and (c) of this Section.
ARTICLE 4
Representations and Warranties
Section 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of
Pennsylvania, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the
24
Borrower of this Agreement and the Notes are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the articles of incorporation or by-laws of
the Borrower or of any material agreement, judgment, injunction, order, decree
or other instrument binding upon the Borrower or any of its Subsidiaries or
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.
Section 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms.
(a) Section 4.04. Financial Information. The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of December 31, 1997 and the
related consolidated statements of earnings and cash flows for the fiscal year
then ended, reported on by independent public accountants and set forth in the
Borrower's 1997 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of March 31, 1998 and the related unaudited
consolidated statements of earnings and cash flows for the three months then
ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such three
month period (subject to normal year-end adjustments).
(c) Since March 31, 1998 there has been no material adverse change in the
business, financial position, operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
25
(i) Section 4.05. Litigation. Except as disclosed in the Borrower's 1997 Form
10-K, in the Borrower's Latest Form 10-Q or in the Borrower's Schedule 14D-1
filed with the Securities and Exchange Commission in connection with the Offer
or as may hereafter be disclosed in writing by the Borrower to the Banks or in
reports filed with the Securities and Exchange Commission, there is no action,
suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, financial position, operations or prospects of
the Borrower and its Consolidated Subsidiaries, considered as a whole, or the
ability of the Borrower to perform its obligations under this Agreement and the
Notes. There is no action, suit or proceeding pending against, or the knowledge
of the Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official which in any manner draws into question the validity of this Agreement
or the Notes.
Section 4.06. Environmental Matters. In the ordinary course of its
business, the Borrower reviews the effect of Environmental Laws on the business,
operations and properties of the Borrower and its Subsidiaries, in the course of
which it identifies and evaluates associated liabilities and costs. On the basis
of this review, the Borrower has reasonably concluded that, to the best of its
knowledge, except as disclosed in reports filed with the Securities and Exchange
Commission, copies of which reports have been delivered to the Banks, such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
Section 4.07. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
Section 4.08. Significant Subsidiaries. Each of the Borrower's
Significant Subsidiaries is a corporation duly incorporated, validly
26
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Section 4.09 Not an Investment Company. The Borrower is not an "INVESTMENT
COMPANY" within the meaning of the Investment Company Act of 1940, as amended.
Section 4.10 Full Disclosure. All information heretofore furnished by the
Borrower to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Administrative
Agent or any Bank will be, true and accurate in all material respects on the
date as of which such information is stated or certified. The Borrower has
disclosed to the Banks in writing or in reports filed with the Securities and
Exchange Commission, copies of which reports have been delivered to the Banks,
any and all facts which materially and adversely affect or may affect (to the
extent the Borrower can now reasonably foresee) the business, operations or
financial condition of the Borrower and its Consolidated Subsidiaries, taken as
a whole, or the ability of the Borrower to perform its obligations under this
Agreement.
ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note remains unpaid:
Section 5.01 Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 120 days after the end of each
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on in a manner acceptable to the Securities and Exchange
27
Commission by independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after the end of each
of the first three quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated statements of income and cash flows
for such quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in the case of such statements of income and
cash flows in comparative form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief financial
officer or the chief accounting officer of the Borrower (i) setting forth in
reasonable detail the calculations required to establish whether the Borrower
was in compliance with the requirements of Sections 5.07 to 5.08, inclusive, on
the date of such financial statements and (ii) stating whether any Default
exists on the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) within five days after any officer of the Borrower obtains knowledge of any
Default, if such Default is then continuing, a certificate of the chief
financial officer or the chief accounting officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements
so mailed;
(f) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group (i) gives or is required to give
notice to the PBGC of any "REPORTABLE EVENT" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event,
28
a copy of the notice of such reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth details as
to such occurrence and action, if any, which the Borrower or applicable member
of the ERISA Group is required or proposes to take; and
(h) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request.
Section 5.02 Payment of Obligations. The Borrower will pay and discharge,
and will cause each Significant Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Significant Subsidiary to maintain, in accordance with generally accepted
accounting principles, appropriate reserves for the accrual of any of the same.
Obligations and liabilities in an aggregate amount equal to or less than
$20,000,000 will not be deemed "MATERIAL" for purposes of this Section 5.02.
(a) Section 5.03 Maintenance of Property; Insurance. The Borrower will keep,
and will cause each Significant Subsidiary to keep, all property material to its
business in good working order and condition, ordinary wear and tear excepted.
(b) The Borrower and its Significant Subsidiaries will maintain insurance with
sound and reputable insurers against at least such
29
risks (and in at least such amounts, subject to such risk retentions) as are
usually insured against in the same geographic area by companies of established
repute engaged in the same or a similar business.
Section 5.04 Conduct of Business and Maintenance. The Borrower will
preserve, renew and keep in full force and effect, and will cause each
Significant Subsidiary to preserve, renew and keep in full force and effect
their respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
that nothing in this Section 5.04 shall prohibit (i) the merger of a Subsidiary
into the Borrower or the merger or consolidation of a Subsidiary with or into
another Person if the corporation surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect thereto, no Default shall
have occurred and be continuing or (ii) the termination of the corporate
existence of any Subsidiary if the Borrower in good faith determines that such
termination is in the best interest of the Borrower and is not materially
disadvantageous to the Banks.
Section 5.05 Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established in accordance with generally accepted
accounting principles.
Section 5.06 Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
Section 5.07 Minimum Consolidated Net Worth. Consolidated Net Worth will
at no time be less than $650,000,000.
30
Section 5.08 Negative Pledge. Neither the Borrower nor any Subsidiary will
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt outstanding on
the date of this Agreement in an aggregate principal or face amount not
exceeding $50,000,000;
(b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such asset, provided that
such Lien attaches to such asset concurrently with or within 180 days after the
acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by the
Borrower or a Subsidiary and not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or refunding of
any Debt secured by any Lien permitted by any of the foregoing clauses of this
Section, provided that such Debt is not increased and is not secured by any
additional assets;
(g) Liens arising in the ordinary course of its business which (i) do not
secure Debt or Derivatives Obligations, (ii) do not secure any obligation in an
amount exceeding $25,000,000 and (iii) do not in the aggregate materially
detract from the value of its assets or materially impair the use thereof in the
operation of its business;
(h) Liens on cash and cash equivalents securing Derivatives Obligations,
provided that the aggregate amount of cash and cash equivalents subject to
such Liens may at no time exceed $25,000,000;
(i) Liens on Margin Stock, if and to the extent that the value of such Margin
Stock exceeds 25% of the total assets of the Borrower and its Subsidiaries
subject to this Section; and
(j) Liens not otherwise permitted by the foregoing clauses of this Section
securing Debt in an aggregate principal or face amount at any date not to
exceed 10% of Consolidated Net Worth.
Section 5.09 Consolidations, Mergers and Sales of Assets. The Borrower
will not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer, directly or indirectly, in a single transaction or
a series of related transactions all or any substantial part of the assets of
the Borrower and its Subsidiaries,
31
taken as a whole, to any other Person; provided that nothing in this Section
shall restrict the sale of Margin Stock for cash consideration in an amount not
less than the fair market value thereof. For purposes of this Section, a
substantial part of the assets of the Borrower and its Subsidiaries, taken as a
whole, shall mean 20% or more of the consolidated assets of the Borrower and its
Consolidated Subsidiaries.
Section 5.10 Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Borrower for its general corporate purposes. None
of such proceeds will be used in violation of Regulation T, U or X of the Board
of Governors of the Federal Reserve System.
ARTICLE 6
Defaults
Section 6.01 Events of Default. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or shall
fail to pay within three days of the due date thereof any interest on any Loan,
any fees or any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.07 to 5.10, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by clause (a) or (b)
above) for 30 days after notice thereof has been given to the Borrower by the
Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been incorrect
in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in respect of
any Material Financial Obligations when due or within any applicable grace
period;
(f) any event or condition shall occur which results in the acceleration of the
maturity of any Material Debt or enables (or,
32
with the giving of notice or lapse of time or both, would enable) the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) the Borrower or any Significant Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Significant Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Significant Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $5,000,000 which it shall have become liable to
pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $20,000,000;
(j) judgments or orders for the payment of money in excess of $20,000,000 in
the aggregate shall be rendered against the
33
Borrower or any Subsidiary and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days; or
(k) (i) any Person becomes the beneficial owner of 28% or more of the then
outstanding Voting Stock of the Borrower and within five years thereafter
Disinterested Directors no longer constitute at least a majority of the Board of
Directors of the Borrower or (ii) a Business Combination with an Interested
Shareholder occurs which has not been approved by a majority of Disinterested
Directors. (For purposes of this subsection, the terms Person, beneficial owner,
Voting Stock, Disinterested Director, Business Combination, and Interested
Shareholder are defined in Article of the Borrower's Articles of Incorporation
as in effect as of the date hereof);
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 66 2/3% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they shall thereupon
terminate, and (ii) if requested by Banks holding Notes evidencing more than 66
2/3% in aggregate principal amount of the Loans, by notice to the Borrower
declare the Notes (together with accrued interest thereon) to be, and the Notes
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Administrative Agent or the Banks, the
Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
Section 6.02 Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
34
ARTICLE 7
The Agents
Section 7.01 Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under this Agreement and the
Notes as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
Section 7.02. Administrative Agent and Affiliates. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as though
it were not the Administrative Agent, and Morgan Guaranty Trust Company of New
York and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower or any Subsidiary or affiliate
of the Borrower as if it were not the Administrative Agent hereunder.
Section 7.03 Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article 6.
Section 7.04 Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 7.05 Liability of Administrative Agent. Neither the Administrative
Agent nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Administrative Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be
35
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Administrative Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
Section 7.06 Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify the Administrative Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
Section 7.07 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
Section 7.08 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Banks and the Borrower. Upon
any such resignation, the Borrower shall have the right to appoint a successor
Administrative Agent, subject to the approval of the Required Banks. If no
successor Administrative Agent shall have been so appointed and approved, and
shall have accepted such appointment, within 45 days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative
36
Agent, which shall be a commercial bank organized or licensed under the laws of
the United States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent.
Section 7.09. Agents' Fees. The Borrower shall pay to each Agent for its
own account fees in the amounts and at the times previously agreed upon between
the Borrower and such Agent.
Section 7.10. Other Agents. Nothing in this Agreement shall impose any duty
or liability whatsoever on the Documentation Agent or the Syndication Agent in
such capacity.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate. If on or
prior to the first day of any Interest Period for any Fixed Rate Borrowing, the
Administrative Agent is advised by all of the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference Banks
in the relevant market for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist, the obligations of the Banks to make CD Loans
or Euro-Dollar Loans, as the case may be, shall be suspended. Unless the
Borrower notifies the Administrative Agent at least two Domestic Business Days
before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow such Borrowing on such date,
such Borrowing shall instead be made as a Base Rate Borrowing.
37
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any formal request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-
Dollar Loans and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Administrative Agent pursuant to
this Section, such Bank shall designate a different Euro-Dollar Lending Office
if such designation will avoid the need for giving such notice and will not, in
the judgment of such Bank, be otherwise disadvantageous to such Bank. If such
Bank shall determine that it may not lawfully continue to maintain and fund any
of its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
(a) Section 8.03. Increased Cost and Reduced Return. If on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any change in
any applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any formal request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding (i) with
38
respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan
any such requirement included in an applicable Euro-Dollar Reserve
Percentage), special deposit, insurance assessment (excluding, with respect
to any CD Loan, any such requirement reflected in an applicable Assessment
Rate) or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or
on the United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans, its
Note or its obligation to make Fixed Rate Loans and the result of any of
the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Administrative
Agent), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any formal request or
directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency (including
any determination by any such authority, central bank or comparable agency
that, for purposes of capital adequacy requirements, the Commitments
hereunder do not constitute commitments with an original maturity of one
year or less), has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy)
by an amount deemed by such Bank to be material, then from time to time,
within 15 days after demand by such Bank (with a copy to the Administrative
Agent), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank (or its Parent) for such reduction.
39
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
(d) Section 8.04. (a) Taxes. For purposes of this Section 8.04, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank
and the Administrative Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which such
Bank or the Administrative Agent (as the case may be) is organized or in
which its principal executive office is located or, in the case of each
Bank, in which its Applicable Lending Office is located and (ii) in the
case of each Bank, any United States withholding tax imposed on such
payments but only to the extent that such Bank is subject to United States
withholding tax at the time such Bank first becomes a party to this
Agreement.
"OTHER TAXES" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any
Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the
Borrower shall be required by law to deduct any Taxes or Other Taxes from
any such payments, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 8.04) such Bank or the
Administrative Agent (as the case may be) receives an amount
40
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Administrative Agent, at its address referred to in Section
9.01 the original or a certified copy of a receipt evidencing payment
thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.04) paid by such Bank
or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be paid within 15 days after
such Bank or the Administrative Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages
hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully
able to do so), shall provide the Borrower with Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is entitled to benefits
under an income tax treaty to which the United States is a party which
exempts the Bank from United States withholding tax or reduces the rate of
withholding tax on payments of interest for the account of such Bank or
certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.04(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.04(b) or 8.04(c) with respect to Taxes imposed by the United States;
provided that if a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, becomes subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover
such Taxes.
41
(e) If the Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless
and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD Loans or
Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate
Loans (on which interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
Section 8.06. Substitution of Bank. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section or
(ii) any Bank has demanded compensation under Section 8.03 or 8.04, the
Borrower shall have the right, with the assistance of the Administrative
Agent, to seek a mutually satisfactory substitute bank or banks (which may
be one or more of the Banks) to purchase the Note and assume the Commitment
of such Bank.
42
ARTICLE 9
Miscellaneous
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Administrative Agent, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address, facsimile number or telex
number set forth in its Administrative Questionnaire or (z) in the case of any
party, such other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received or (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
Section 9.02. No Waivers. No failure or delay by the Administrative
Agent or any Bank in exercising any right, power or privilege hereunder or under
any Note shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Administrative Agent, including
fees and disbursements of special counsel for the Administrative Agent, in
connection with the preparation and administration of this Agreement, any waiver
or consent hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Administrative Agent and each Bank, including (without
duplication) the fees and
43
disbursements of outside counsel and the allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that (i) no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction, (ii) in
the case of an investigation or a proceeding to which an Indemnitee is not a
party, such Indemnitee shall be entitled to indemnification only if such
Indemnitee is required to respond to process or other formal inquiry in
connection therewith and (iii) any claim for indemnification hereunder shall be
made not later than three years after the termination of the Commitments and
repayment in full of the Loans.
Section 9.04. Sharing of Set-Offs. The Banks agree among themselves that
if any Bank shall, by exercising any right of set-off or counterclaim or
otherwise, receive payment of a proportion of the aggregate amount of principal
and interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank, the
Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness hereunder.
44
Section 9.05. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent); provided that no such amendment or waiver shall, unless
signed by all the Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, (iii) postpone the date fixed for
any payment of principal of or interest on any Loan or any fees hereunder or for
termination of any Commitment or (iv) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, or the number of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement.
(a) Section 9.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, such Bank shall remain responsible for
the performance of its Commitment and its other obligations hereunder, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), (iii) or
(iv) of Section without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article with respect to its participating
interest. An assignment or other
45
transfer which is not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection
(b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit D hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Administrative Agent, which consents will not be
unreasonably withheld; provided that (i) if an Assignee is a Bank prior to
giving effect to such assignment or is an affiliate of such transferor Bank, no
such consent shall be required and (ii) if at the time of such assignment an
Event of Default shall have occurred and be continuing, no such consent of the
Borrower shall be required. Upon execution and delivery of such instrument and
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note is
issued to the Assignee. In connection with any such assignment, the transferor
Bank shall pay to the Administrative Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made
46
with the Borrower's prior written consent or by reason of the provisions of
Section 8.02, 8.03 or requiring such Bank to designate a different Applicable
Lending Office under certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
Section 9.07. Collateral. Each of the Banks represents to each Agent and
each of the other Banks that it in good faith is not relying upon any Margin
Stock as collateral in the extension or maintenance of the credit provided for
in this Agreement.
Section 9.08 Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 9.09. Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.
Section 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11 Amendment of Existing Agreement. The Borrower and the
Banks which are parties to the $300,000,000 Credit Agreement dated as of
February 7, 1995 and amended as of April 9, 1996 (the "EXISTING AGREEMENT"),
which Banks comprise the "REQUIRED BANKS" as defined in the Existing Agreement,
hereby agree that: (i) Sections 5.08 and 5.09 of the Existing Agreement
47
are amended to read in their entirety as set forth in Sections 5.08 and 5.09 of
this Agreement and (ii) Section 1.01 of the Existing Agreement is amended to
include the definition of "Margin Stock" as set forth in Section 1.01 of this
Agreement.
48
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ARMSTRONG WORLD INDUSTRIES, INC.
By:
Name:
Title:
313 West Liberty Street
Lancaster, PA 17603
Facsimile number: 717-396-2408
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By:
Name:
Title:
60 Wall Street
New York, New York 10260-0060
Attention:
Telex number: 177615
Facsimile number:
COMMITMENTS
- -----------
49
$44,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Name:
Title:
DOCUMENTATION AGENT
- -------------------
$43,000,000 BANK OF AMERICA NT & SA
By:
Name:
Title:
SYNDICATION AGENT
- -----------------
$43,000,000 THE CHASE MANHATTAN BANK
By:
Name:
Title:
MANAGING AGENTS
- ---------------
$42,000,000 THE BANK OF NOVA SCOTIA
By:
Name:
Title:
$42,000,000 BARCLAYS BANK PLC
By:
Name:
Title:
50
$42,000,000 MARINE MIDLAND BANK
By:
Name:
Title:
$42,000,000 WACHOVIA BANK, N.A.
By:
Name:
Title:
CO-AGENTS
- ---------
$33,000,000 COMMERZBANK AG, NEW YORK BRANCH,
By:
Name:
Title:
$33,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By:
Name:
Title:
$33,000,000 FIRST UNION NATIONAL BANK
By:
Name:
Title:
51
$33,000,000 SOCIETE GENERALE FINANCE (IRELAND)
LTD.
By:
Name:
Title:
$33,000,000 THE BANK OF NEW YORK
By:
Name:
Title:
$33,000,000 WESTDEUTSCHE LANDESBANK
By:
Name:
Title:
By:
Name:
Title:
PARTICIPANTS
- ------------
$33,000,000 BW CAPITAL MARKETS, INC.
By:
Name:
Title:
52
$33,000,000 BANQUE NATIONALE DE PARIS
By:
Name:
Title:
By:
Name:
Title:
$33,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
$33,000,000 CREDITO ITALIANO S.P.A
By:
Name:
Title:
By:
Name:
Title:
53
$33,000,000 GENERALE BANK
By:
Name:
Title:
By:
Name:
Title:
$33,000,000 KBC BANK N.V.
By:
Name:
Title:
$33,000,000 LANDESGIROKASSE OFFENTLICHE BANK
UND LANDESSPARKASSE
By:
Name:
Title:
By:
Name:
Title:
54
$33,000,000 MELLON BANK, N.A.
By:
Name:
Title:
$33,000,000 NATIONAL CITY BANK OF PENNSYLVANIA
By:
Name:
Title:
$33,000,000 PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
$33,000,000 SUDWESTDEUTSCHE LANDESBANK
GIROZENTRALE
By:
Name:
Title:
$33,000,000 SUNTRUST BANK, ATLANTA
By:
Name:
Title:
By:
Name:
55
Title:
$33,000,000 TORONTO DOMINION (TEXAS), INC.
By:
Name:
Title:
$25,000,000 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:
Name:
Title:
$25,000,000 ISTITUTO BANCARIO SAN PAOLO DI
By:
Name:
Title:
By:
Name:
Title:
$25,000,000 SKANDINAVISKA ENSKILDA BANKEN
NEW YORK BRANCH AB (PUBL)
56
By:
Name:
Title:
By:
Name:
Title:
TOTAL COMMITMENTS:
$1,000,000,000
==============
57
PRICING SCHEDULE
Each of "FACILITY FEE RATE", "CD MARGIN" and "EURO-DOLLAR MARGIN" means, for any
date, the rate set forth below in the row opposite such term and in the column
and row corresponding to the "PRICING LEVEL" and the "UTILIZATION" at such date:
- -----------------------------------------------------------------------------------------------------------
Level I Level II Level III Level IV
- -----------------------------------------------------------------------------------------------------------
Facility Fee Rate* 0.050% 0.065% 0.080% 0.100%
- -----------------------------------------------------------------------------------------------------------
CD Margin
Utilization less than 33 1/3% 0.350% 0.360% 0.395% 0.450%
Utilization equal to or greater than 33 1/3% 0.425% 0.460% 0.495% 0.575%
Euro-Dollar Margin
Utilization less than 33 1/3% 0.225% 0.235% 0.270% 0.325%
Utilization equal to or greater than 33 1/3% 0.300% 0.335% 0.370% 0.450%
- -----------------------------------------------------------------------------------------------------------
_______________
* Subsequent to December 31, 1998, the Facility Fee Rate applicable to any
excess of the then aggregate amount of the Commitments over $500,000,000 shall
be twice the otherwise applicable rate per annum.
For purposes of this Schedule, the following terms have the following
meanings, subject to the concluding paragraph of this Schedule:
"LEVEL I PRICING" applies at any date if, at such date, the Borrower's
long-term debt is rated (i) A or higher by S&P and no lower than A3 by Moody's
or (ii) A2 or higher by Moody's and no lower than A- by S&P.
- --
"LEVEL II PRICING" applies at any date if, at such date, (i) (A) the
Borrower's long-term debt is rated A- or higher by S&P and no lower than Baa1 by
Moody's or (B) A3 or higher by Moody's and no lower than BBB+ by S&P and (ii)
--
Level I Pricing does not apply.
"LEVEL III PRICING" applies at any date if, at such date, (i) (A) the
Borrower's long-term debt is rated BBB+ or higher by S&P and Baa1 or higher by
---
Moody's and (ii) neither Level I Pricing nor Level II Pricing applies.
58
"LEVEL IV PRICING" applies at any date if, at such date, no other Pricing
Level applies.
"MOODY'S" means Moody's Investors Service, Inc.
"PRICING LEVEL" refers to the determination of which of Level I, Level II,
Level III or Level IV applies at any date.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc.
"UTILIZATION" means, at any date, the percentage equivalent of a fraction
(i) the numerator of which is the aggregate outstanding principal amount of the
Loans at such date (after giving effect to any borrowing or payment on such
date) and the denominator of which is the aggregate amount of the Commitments at
such date (after giving effect to any reduction on such date). If for any
reason any Loans remain outstanding after termination of the Commitments,
Utilization shall be deemed to be 100%.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party enhancement, and any rating assigned to any other debt
security of the Borrower shall be disregarded; provided that until S&P and
Moody's have each assigned (or affirmed) ratings giving effect to the
Acquisition, the credit ratings to be utilized for purposes of this Schedule
shall be those which result in Level III Pricing.
59
Page
----
EXHIBIT A
NOTE
New York, New York
July __, 1998
For value received, Armstrong World Industries, Inc., a Pennsylvania
corporation (the "BORROWER"), promises to pay to the order of
__________________________(the "BANK"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the last day of
the Interest Period relating to such Loan. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and maturities thereof and
all repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement dated as
of July 17, 1998 among the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York, as Administrative Agent
(as the same may be amended from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
ARMSTRONG WORLD INDUSTRIES, INC.
By:
Title:
By:
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- ----------------------------------------------------------------------------------------
Date Amount Type of Amount Maturity Date Notation
of Loan Loan of Made By
Principal
Repaid
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Administrative Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I have acted as counsel for Armstrong World Industries, Inc. (the
"BORROWER") in connection with the Credit Agreement (the "CREDIT AGREEMENT")
dated as of July 17, 1998 among the Borrower, the banks listed on the signature
pages thereof and Morgan Guaranty Trust Company of New York, as Administrative
Agent. Terms defined in the Credit Agreement are used herein as therein
defined. This opinion is being rendered to you at the request of my client
pursuant to Section 3.01(c) of the Credit Agreement.
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
I am licensed to practice law in the Commonwealth of Pennsylvania. The law
covered by this opinion is limited to the laws of the Commonwealth of
Pennsylvania and the Federal laws of the United States. I have assumed for the
purposes of this opinion that the substantive law of the State of New York is
identical in all material respects to the substantive law of the Commonwealth of
Pennsylvania.
Upon the basis of the foregoing, I am of the opinion that:
(1) . The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of Pennsylvania, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
(2) . The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or by-laws of the Borrower or of
any material agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
(3) . The Credit Agreement constitutes a valid and binding agreement of
the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
(4) . Except as disclosed in the Borrower's 1997 Form 10-K, in the
Borrower's Latest Form 10-Q or in the Borrower's Schedule 14D-1 filed with the
Securities and Exchange Commission in connection with the Offer, there is no
action, suit or proceeding pending against, or to the best of my knowledge
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official, in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, financial position, operations or prospects of
the Borrower and its Consolidated Subsidiaries, considered as a whole, or the
ability of the Borrower to perform its obligations under the Credit Agreement
and the Notes, or which in any manner draws into question the validity of the
Credit Agreement or the Notes.
(5) . Each of the Borrower's Significant Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Very truly yours,
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENTS
To the Banks and the Administrative Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"CREDIT AGREEMENT") dated as of July 17, 1998 among Armstrong World Industries,
Inc., a Pennsylvania corporation (the "BORROWER"), the banks listed on the
signature pages thereof (the "BANKS") and Morgan Guaranty Trust Company of New
York, as Administrative Agent (the "ADMINISTRATIVE AGENT"), and have acted as
special counsel for the Agents for the purpose of rendering this opinion
pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in the
Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Note constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect and we have relied, without
independent investigation, as to all matters of Pennsylvania law on the opinion
of David D. Wilson, counsel for the Borrower, of even date herewith, copies of
which have been delivered to you.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by any other person without our prior written consent.
Very truly yours,
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the "ASSIGNOR"),
[ASSIGNEE] (the "ASSIGNEE"), ARMSTRONG WORLD INDUSTRIES, INC. (the "BORROWER")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "AGREEMENT") relates
to the Credit Agreement dated as of July 17, 1998 among the Borrower, the
Assignor and the other Banks party thereto, as Banks, and the Administrative
Agent (the "CREDIT AGREEMENT");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at any
time outstanding not to exceed $__________;
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement in the aggregate principal amount of $__________ are outstanding at
the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "ASSIGNED AMOUNT"),
together with a corresponding portion of its outstanding Loans, and the Assignee
proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1.1 Section . Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
1.2 Section . Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Loans made by the Assignor outstanding at the date hereof. Upon the execution
and delivery hereof by the Assignor, the Assignee[, the Borrower and the
Administrative Agent] and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the obligations of a
Bank under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
1.3 Section . Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.* It is
understood that commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and including the
date hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
1.4 Section . Consent of the Borrower and the Administrative Agent. This
Agreement is conditioned upon the consent of the Borrower and the Administrative
Agent pursuant to Section 9.06(c) of the Credit Agreement. The execution of
this Agreement by the Borrower and the Administrative Agent is evidence of this
consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and deliver
a Note payable to the order of the Assignee to evidence the assignment and
assumption provided for herein.
1.5 Section . Non-reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Borrower, or the
validity and enforceability of the obligations of the Borrower in respect of the
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into
- --------------------
*
Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.
1.6 Section . Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
1.7 Section . Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:
Title:
[ASSIGNEE]
By:
Title:
ARMSTRONG WORLD INDUSTRIES, INC.
By:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Title: